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ASEAN STOCK WATCH Asean Affairs   18 May 2012

ASEAN Markets to Lead Recovery

By Shayne Heffernan Ph.D.

The MSCI All-Country World Index lost as much as 0.8 percent to extend its retreat from this year’s peak to 10 percent. Russia’s Micex Index entered a bear market, dropping 21 percent from this year’s March 14 high, while Brazil’s Bovespa index also was poised to slump more than 20 percent from its peak. The S&P 500 has fallen 7.5 percent since reaching an almost four-year high on April 2.

Markets will be trading lower today after flat data on employment in the USA and yet another downgrade of Greece.

Greece’s credit rating was downgraded one level by Fitch Ratings on “heightened risk” that the country will not be able to sustain its membership of the euro area after inconclusive elections left the country without a stable government.

Greece was cut to CCC from B- by Fitch, according to an e- mailed statement today in London. The country’s ceiling was revised to B-, Fitch said in the statement.

Nine out of 10 groups in the S&P 500 declined as an index of leading indicators slid and manufacturing in the Philadelphia region unexpectedly shrank. Caterpillar Inc. and JPMorgan Chase & Co. dropped at least 3.5 percent. The Nasdaq-100 Index fell for an eighth day, the longest slump since 2010, as Apple Inc. (AAPL) sank 2.2 percent. Wal-Mart Stores Inc. (WMT), the largest retailer, rallied 4.9 percent as profit beat analysts’ estimates.

Tokyo rose 0.86 percent, or 75.42 points, to 8,876.59 and Seoul added 0.26 percent, or 4.71 points, to 1,845.24 and Shanghai climbed 1.39 percent, or 32.70 points, to 2,378.89.

But a late sell-off saw Hong Kong give up its day’s gains to end 0.31 percent, or 58.90 points, lower at 19,200.93 while Sydney eased 0.19 percent, or 8.1 points, to 4,157.4.


The Bank of Thailand last week raised its economic growth forecast for 2012 to 6 percent, and Governor Prasarn Trairatvorakul said earlier the monetary authority will refrain from further rate cuts because the pace of recovery is exceeding its expectations. Honda Motor Co. on March 31 said its plant in Ayutthaya province, which was shuttered after last year’s floods, will now run at full capacity to meet market demand.

The baht has gained 0.4 percent against the dollar this year, and the benchmark SET Index (SET) of stocks has climbed more than 14 percent. Overseas investors may pare their equity holdings “because they have been one of the biggest gainers in the region this year,” Stock Exchange of Thailand President Charamporn Jotikasthira said in a May 16 interview.

There are also risks stemming from Greece’s inability to form a new government after an inconclusive election, which could deepen Europe’s debt turmoil, adding to challenges from a China growth slowdown and an uneven U.S. recovery.


The FBM KLCI index lost 25.03 points or 1.60% on Wednesday. The Finance Index fell 1.09% to 13760.01 points, the Properties Index dropped 1.08% to 967.09 points and the Plantation Index down 2.49% to 8156.61 points. The market traded within a range of 23.20 points between an intra-day high of 1558.25 and a low of 1535.05 during the session.

Actively traded stocks include AGLOBAL, FOCUS, LUSTER, SAAG, NICORP, SANICHI, MTRONIC, UTOPIA, ASUPREM and PCHEM. Trading volume increased to 1330.99 mil shares worth RM2061.03 mil as compared to Tuesday’s 1121.29 mil shares worth RM1645.06 mil.

Leading Movers were RHBCAP (+7 sen to RM7.27) and UEMLAND (+1 sen to RM1.96). Lagging Movers were TENAGA (-28 sen to RM6.17), SIME (-19 sen to RM9.54), CIMB (-14 sen to RM7.18), IOICORP (-11 sen to RM4.90) and DIGI (-7 sen to RM3.90). Market breadth was negative with 97 gainers as compared to 822 losers.


Singapore’s economy grew by 1.6% Y-Y in Q-1 of Y 2012, slower than 3.6% growth in the prior Quarter, Singapore’s Ministry of Trade and Industry announced Thursday.

On a Q on Q seasonally-adjusted annualized basis, the economy expanded by 10.0%, reversing the 2.5% contraction in the previous quarter, it said.

The improved growth momentum was largely attributable to the upturn in the manufacturing sector. On a sequential basis, the manufacturing sector expanded by an annualized rate of 19.8%, reversing the 11.1% contraction in the prior Quarter.

The ministry said this turnaround was driven by increased production across all Key manufacturing zones, notably electronics and precision engineering.

On a Y on Y basis, however, the sector contracted by 1.0% due to a high base a year ago.

The construction sector grew by 7.7% on a Y on Y basis, an improvement from the 2.9% growth in the prior Quarter.

On a sequential basis, the sector rebounded by an annualized rate of 32.1%, largely due to increased construction activities in the residential and institutional building segments.

The wholesale and retail trade sector contracted by 0.3% Y on Y, following the marginal growth of 0.9% in the prior Quarter. On a sequential basis, the sector contracted by an annualized rate of 2.3%. This weak performance was mainly attributable to a decline in re-export volume which negatively affected the wholesale trade segment.

The transportation and storage sector continued to see moderate growth, at 3.5% compared to a year ago and 1.5% (annualized) on a sequential basis.

Growth in the finance and insurance sector moderated to 0.8% Y on Y, from 3.5% in the prior Quarter. On a sequential basis, the sector contracted for the second consecutive quarter, by 3.4% (annualized), partly due to sluggishness in fund management activities.

In contrast, the business services sector posted a faster Y on Y growth of 3.5% and a strong sequential gain of 12.7% (annualized), largely due to a pick-up in real estate transaction volume.

Supported by healthy visitor arrivals, tourism-related sectors continued to expand. The accommodation and food services and other services industries (which include arts, entertainment and recreation activities) grew by 4.0 and 5.1% respectively, compared to a year ago.

– Singapore ended 0.30 percent, or 8.54 points, lower at 2,822.61

Oversea-Chinese Banking Corp. shed 0.35 percent to Sg$8.57, while container shipping firm Neptune Orient Lines was down 2.84 percent at Sg$1.03.

– Taipei rose 1.69 percent, or 122.20 points, to 7,356.77.

Taiwan Semiconductor Manufacturing Co. gained 2.04 percent to Tw$85.1 while Hon Hai Precision ended up 3.50 percent at Tw$85.7.

– Manila surged 3.14 percent, or 152.79 points, to 5,017.02.

SM Investments rose 2.58 percent to 696 pesos, Philippine Long Distance Telephone gained 1.34 percent to 2,418 pesos and DMCI Holdings jumped 3.39 percent to 61 pesos.

– Wellington closed 0.20 percent, or 7.00 points, higher at 3,521.51.

Contact Energy fell 0.41 percent to HK$4.88, Fletcher Building was 1.12 percent higher at HK$6.30 and Telecom gained 0.59 percent to HK$2.55.

– Kuala Lumpur added 0.53 percent, or 8.17 points, to 1,544.21

Petronas Chemicals Group gained 0.94 percent to 6.46 ringgit, while financial firm CIMB Group Holdings added 0.97 percent to 7.25 ringgit. Plantation giant Sime Darby eased 0.63 percent to 9.48 ringgit.

– Bangkok edged up 0.20 percent or 2.33 points to 1,173.56.

Banpu added 1.19 percent to 512 baht, while Siam cement dropped 0.87 percent to 341 baht.

– Mumbai ended up 0.25 percent, or 40.39 points at 16,070.48.

– Jakarta was closed for a public holiday.

Shayne Heffernan Ph.D.  

Linda Johnson, Business Development Director - Private Client Group, Heffernan Capital Management
3 Raffles Place #07-01
Bharat Building Singapore 048617
Tel: +65 6329 6408 Fax: +65 6329 9699
Email :
Suite 53 Athenee Tower
63 Wireless Road, Lumpini, Pathumwan, Bangkok 10330
New York 347 5th Avenue, Suite 1402-508 NY, NY 10016


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AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

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